Retained Legal Counsel in Japan｜What a Komon Keiyaku Is, What It Covers and What It Costs

In Japan it is common for a company to enter into a standing legal retainer (komon keiyaku) with a law firm, pay a monthly fee, and draw on that firm continuously for its day-to-day legal work. For a foreign company with a subsidiary or customers in Japan, however, it is rarely obvious what such a retainer delivers, how it is priced, or how it differs from instructing a lawyer on a single matter. What follows is an explanation under Japanese law and Japanese professional practice.

Contents

What a komon keiyaku is
What the retainer usually covers
The fee: what is included and what is charged separately
Why it matters to a foreign company with customers or a subsidiary in Japan
The retainer in debt collection
Retainer or instruction on a single matter?
In closing
How to contact us

What a komon keiyaku is

A komon keiyaku is an agreement by which a company entrusts its legal work to a law firm on a continuing basis and pays a monthly retainer fee (komon-ryo) in return. In legal terms it is a mandate under the Civil Code of Japan; in practice it usually runs for one year, renews automatically, and may be terminated on notice given a stated period in advance. Unlike an instruction on a single case, it is not directed at one identified matter: it provides continuing advice and assistance across whatever arises. A lawyer engaged in this way is referred to in Japan as the company’s komon bengoshi, its retained counsel.

What the retainer usually covers

Day-to-day advice — questions on commercial, employment and corporate governance matters, raised by telephone, email or video conference as they arise.
Contract review — drafting and reviewing sale, works, service, confidentiality and lease agreements, and proposing amendments to the allocation of risk.
Internal rules — preparing and revising work rules, confidentiality policies and personal information handling rules.
Dispute prevention — advice given in advance on trading terms, the form of demands and the preservation of evidence, so that disagreements do not harden into litigation.
First response in an emergency — an initial assessment and a plan of action when a claim, an inspection by the authorities, an accident or a press enquiry arrives.
Referral to other lawyers and professionals — introducing and coordinating tax, employment, patent or foreign law specialists where the matter requires them.

The fee: what is included and what is charged separately

The level of the retainer fee varies with the size of the firm, the scope of work agreed and the volume of work actually expected; there is no uniform tariff, and the figure is normally settled case by case before the agreement is signed. Japanese practice also draws a clear line: the retainer fee covers routine advice and document review, while litigation, provisional remedies and compulsory execution are individual matters for which an initial fee (chakushukin) and a success fee are charged separately. Many firms discount those fees for retainer clients, but the terms of any such discount should be recorded in writing when the retainer is signed rather than assumed.

Why it matters to a foreign company with customers or a subsidiary in Japan

What foreign companies most often encounter in Japan is not a question of which law is better, but a gap in practice. Japanese contract practice has settled conventions on how terms are recorded, on the use of company seals, and on the relationship between a master trading agreement and individual orders; negotiations are usually conducted in Japanese; and once a matter reaches a Japanese court, the form of the written submissions and the rhythm of the hearing dates differ from what a foreign party expects. Retained counsel allows those points to be settled at once, without finding a new lawyer and explaining the background from the beginning each time. Where a Japanese subsidiary exists, reconciling the parent’s policies with the constraints of Japanese law is likewise part of that ordinary work.

The retainer in debt collection

At the outset of trading — credit checks on the counterparty, and contract terms on payment dates, late payment interest, security and jurisdiction settled before the first shipment. Recovery is very often won or lost at this stage.
At the first signs of late payment — a formal demand by notice or content-certified mail (naiyo-shomei yubin, a Japanese postal certification system) as soon as the default appears, and an assessment of whether provisional attachment (kari-sashiosae) should be sought before proceedings are commenced. The speed of that assessment determines what is left to recover.
Managing prescription — under the Civil Code as amended with effect from 1 April 2020, a claim is extinguished five years from the time the creditor became aware that the right could be exercised, or ten years from the time it could be exercised, whichever comes first. Where receivables are numerous, retained counsel can review the dates of accrual and expiry at regular intervals.

Retainer or instruction on a single matter?

Not every company needs a retainer. Where legal questions arise only occasionally and each is substantial, instructing counsel matter by matter is sufficient. Where transactions are numerous, contracts change hands frequently, staff numbers are significant, or the company has established a presence in Japan, a retainer usually restrains the overall cost and allows problems to be addressed while they are still small. Many companies begin with a single instruction and enter into a retainer once both sides have seen how the other works; that sequence is common in Japan.

In closing

The value of a retainer lies less in resolving disputes than in preventing them, and in making the first step the right one at the moment a dispute begins. Our practice is centred on debt collection and corporate legal work, and we accept both retainers and individual instructions from foreign companies with customers or a subsidiary in Japan. We are equally glad to work through the company’s own counsel abroad.

How to contact us

Telephone 03-6435-8418 within Japan, or +81-3-6435-8418 from overseas. Lines are open from 08:00 to 24:00 Japan time, including Saturdays, Sundays and public holidays. Enquiries are also received at any hour through the form on this site.

M&A Partners Law Office LPC　Katsuhiro Tsuchiya, Representative Attorney-at-Law (Tokyo Bar Association, Registration No. 26775)　17F Mori Trust Shiroyama Trust Tower, 4-3-1 Toranomon, Minato-ku, Tokyo, Japan

This article is a general explanation based on the laws and practice of Japan as at August 2026 (Reiwa 8). The outcome of any particular matter depends on its own facts, and no specific result is guaranteed.

Contents